Friday, June 25, 2010

Environmental advocates are warning against exemptions and loopholes in a proposed severance tax bill.The budget touted by Governor Ed Rendell and House Democrats includes a tax on natural gas drilling.None of the tax proposals currently in the House include an exemption for wells in their first three years of operation, but Representative Dave Levdansky, an Allegheny County Democrat, says the drilling industry is lobbying for one.

"Why do we need to give the gas drilling industry any more incentive than they already have to come to Pennsylvania and drill? They are here. And they are here for some very significant reasons that will not at all be impacted by granting them exclusions from the tax."

Governor Rendell has proposed transferring revenue from several environmental funds into the general fund, in order to trim Pennsylvania’s deficit.PennFuture CEO Jan Jarrett says a severance tax would eliminate the need for such a move."If we can get a severance tax in place, there’s not the need to take these drastic cuts that we’re taking to very important environmental programs that benefit Pennsylvanians all over the state."

Jarrett says Rendell’s proposal would “eviscerate” environmental protection funds.A new report from the left-leaning Pennsylvania Budget and Policy Center claims a three year exemption means more than 40 percent of the gas yielded from an average well would go untaxed, since wells are typically more productive early on.House leaders have tried to pass a severance tax twice in recent weeks, but both times, they pulled the measure due to a lack of support.